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Amid the ongoing coverage of the expansion of the Occupy movement from Wall Street to other areas of the country and world, we have forgotten about a recent news item that puts it all in perspective. Earlier this month, Bank of America announced that it would be charging a $5 monthly fee for debit card usage.
CEO Brian Moynihan argued that BOA was justified in charging the fee as a means of making a profit because its shareholders demand it and it was giving everyone advanced notice.
While this was top news for about a few days, it has gone off the radar screen. I raise this issue of BOA to see if we as a community would ever become incensed if Tech tried such a maneuver with our Hokie Passports.
While every member of the community is required to have a valid Hokie Passport, imagine if Tech were to charge a usage fee for those of us who use our Hokie Passports for meals, as a charge card or even in the soda and laundry machines? How would we react? Would we merely accept it? Would we be considered disloyal to the institution if we protested against its
actions?
Just as BOA can think of it, I suspect that some individuals at Tech may have thought about the same thing. If such a fee were to happen, it would have a huge impact on the usage of the Hokie Passport for any other purpose than showing it as a proof of identification.
Basically, students with meal plans or anyone using their cards with Dining Dollars would be paying an additional tax to use their cards. These students would have no viable alternatives, especially if they lived on campus and were required to have a meal plan.
While this scenario may appear to be far-fetched, we should not allow things to get to this point. Moynihan defended the new debit card fee because they need to make money to be profitable.
With Gov. Bob McDonnell asking state agencies to plan for a 6 percent reduction for the upcoming biennial budget, the question of how Tech will handle the budget issue is an important one, as it is still reeling from the last round of budget
cuts.
Without resources from the state government, the only means of revenue is through student fees and tuition. We have already seen steady increases in the tuition and fees students pay to cover costs.
With students already spending hundreds of dollars on textbooks, how would they feel about having to pay, for example, a $20 fee per class for teaching supplies? While this question may appear to be rhetorical, this happens today within the local school system, as families are required to purchase supplies from a sheet provided by the school.
It has become so routine that you can go into any Target, Kmart or Walmart during the back-to-school sales, pick up the list and shop. Gone are the days when schools provide the staples of the classroom.
In another example, there are certain university offices that no longer have live receptionists for outside calls. Instead, you have to call and leave a message, or send an email to reach someone. This can be frustrating for those trying to speak to a live person right away, instead of having to wait for someone to call back.
I don’t believe that sacrificing customer service to save additional budget dollars is worth it.
The example of BOA is just one possible indicator of what may happen. I raise the issue because we often think that real world crises don’t impact us within the university.
My only hope is that the institution will be sincere in engaging the university community if it were to consider any radical options to raise revenue. As a community, we need to be prepared to discuss these difficult issues when they happen.
A version of this article appeared in the Oct 25 issue of the Collegiate Times.
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uhhh, I don't really see your point. VT already does that with everything else. you're required to pay a gym fee, an academic fee, a bus fee, etc. ... why couldn't they charge a hokie passport fee?
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The main thing like you mentioned is everyone is required to have a hokie passport here at tech but bank customers are not required to have or use their debit cards. If tech did do such a fee, it wouldn't be justified unless they remove the requirement of needing a hokie passport. Then again, it could just be another tax or fee you have to pay on top of the dozen other fees.
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I fail to see how being required to have a hokie passport makes it justified or not justified. you are not required to go to mccomas or play intramural sports, yet you still have to pay the athletic fee. all the school is doing is itemizing expenses so that when they advertise tuition it appears 3000/year lower than what it should be. if they added 5 dollars/semester to tuition to pay for the use of the hokie passport (which i'm sure is already included in tuition; now it would only be separated) nobody would give a stink. it's like social security, nobody requires you to collect on it, but you're still required to pay into it.
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Exactly, just a few weeks ago I had to pay a random $85 "computer/technology fee" that was tacked on after I paid my tuition in August because I'm a CS major. Same thing happened last year. I couldn't protest or refuse to pay, or I wouldn't be able to sign up for courses. Tech holds your degree ransom if you have unpaid parking tickets too.
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unfortunately I will have to pay the $5 fees because I need my debit card as a college student. I'm not going to withdraw cash to pay for everything. Can't do anything about it, it's just a side effect of the recent banking regulations that were recently placed on banks.
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...or you could just get a check card and run "as credit," rather than as debit. Wouldn't that circumvent the $5 charge? Or you could get a credit card, put all your expenses for the month on that, and pay it off with a check every month. There are other ways to handle banking than with a debit card.
OR, you could just bank somewhere else - like Wells Fargo, which is probably more convenient than BOA.
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Too bad Wells Fargo has announced that they are thinking about doing the exact same thing.
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Too bad Wells Fargo has announced that they are thinking about doing the exact same thing.
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Okay, have they done it yet? Let's say they do...
Why not just use your check card as credit or use a credit card that you pay off every month with a check? I'm confused as to why either of those things seem difficult to anyone.
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1. The fee would still exist if you use debit as credit. At least, that has been directly applied to me before (I always use debit as credit for convenience).
2. The whole thing about credit cards is the reason why this fee is being applied in the first place. Our economy has tanked because of debt. Americans finally wised up to this fact and started using debit -- using their OWN money to pay for their expenses -- at much higher rates. Banks wanted to capitalize on this increase in debit, thus the fees. I think that encouraging the use of credit cards again is a terrible idea. Trusting people with credit is what has led to a lot of financial mess nationwide. I think people are justified in being mad for paying a fee to use their own money, which they lend to the banks to invest and make millions. If there was a fee to write paper checks, it would be ridiculous -- there would be no way to access your own money without penalty. Why, in a modern world where paper checks are absurdly outdated, should we have to pay to use our check cards?
It's rules like this that make good financial management inaccessible to lower income people. If you live paycheck to paycheck, that $5 fee could be the difference between overdrafting or not, and thus huge fees which you could not afford.
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1. Alright, so debit as credit is out - I bank with WF, so this has not been imposed on me yet.
2. Being responsible with credit is part of being an adult. Any adult SHOULD be able to keep track of their expenses, put all of them on one card for the month, and pay the balance at the end of the month. But if you are not capable of this, you need to find another bank that will allow you to use a check/debit card without the fees being imposed by BofA and maybe WF in the future. There are plenty of local banks and credit unions that do this. If you live paycheck to paycheck, there is no need for you to bank with WF or BofA, as you're probably not doing business or travelling more than 100 miles from home.
So if a $5 fee will kill you, you need to switch banks! If people generally don't like the fees, they will do just that. That's how the free market works.
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One more thing, Anonymous 11:17...
The idea that good financial management is not accessible to people of lower income is a complete farse. Good financial management does NOT come from a bank. It comes from the individual. Blaming the big banks for the poor financial managment of lower income people isn't just wrong, it's flat out reprehensible.
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The outrage over bank fees is hilarious. Let's not forget that free checking didn't exist until we started getting such a booming economy. Now that the economy is down they're hitting people up again. Since when was it a human right to have a free bank account. Banks are providing you with a service like cable or electricity or housekeeping. The question is why should you be getting it for free?
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People have always been paying the bank fee, just not explicitly. Banks receive an interest rate from the FED on money they borrow or on bonds they purchase. In exchange for keeping your cash (liquid like in a checking acc) they give you an interest rate less than this FED rate. This difference is where they pay for cost of business and make some profit. The five dollar fee is accounting for the fact that the FEDs interest rate is 0% and therefore they can't charge you a negative rate or you wouldn't have an incentive to put your money in the bank in the first place. The only gripe I can see with the fee based system is that it is not progressive ... The more money you have in the bank the more you contribute under the interest rate based system. Since banks now have to charge fees, then they have to charge everybody the same rate or each bank would compete to have the lowest fee for those with larger assets which means their only play is to charge everybody the same flat fee.
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